Charity Without The Checks

The worst mistake a nonprofit can make is to take all the money you're given and be beholden to doing things on someone else's terms." That's how Linda Rottenberg explains turning down an enviable $450,000 grant last March from the government of Chile to her nonprofit organization, Endeavor. Like most government gifts, it came packaged in red tape. At the time, Chilean President Ricardo Lagos--and no doubt many of Rottenberg's fellow nonprofiteers--had two printable words for her: "You're crazy."

Far from it. Rottenberg's principled stance has enabled Endeavor to excel in a new kind of charitable role, that of "venture...